DAVID MAKOL, being duly sworn, deposes and says that he is a Special Agent of the Federal Bureau of Investigation, and charges as follows: COUNT ONE

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1 Approved: MICHAEL S. SCHACHTER Assistant United States Attorney Before: HONORABLE GABRIEL W. GORENSTEIN United States Magistrate Judge Southern District of New York x : SEALED COMPLAINT UNITED STATES OF AMERICA : : Violation of - v. - : 18 U.S.C. 2, 371; : 15 U.S.C. 78j(b) ZVI FUKS, : and 78ff; 17 C.F.R. a/k/a Zvi Fuchs, and : b-5 SABINA BEN-YEHUDA, : a/k/a Sonia Ben-Yehuda, : : Defendants. : : COUNTY OF OFFENSE: : NEW YORK x SOUTHERN DISTRICT OF NEW YORK, ss.: DAVID MAKOL, being duly sworn, deposes and says that he is a Special Agent of the Federal Bureau of Investigation, and charges as follows: COUNT ONE (Conspiracy to Commit Fraud in Connection with the Purchase and Sale of Securities) The Conspiracy 1. On or about December 27, 2001, in the Southern District of New York and elsewhere, ZVI FUKS, a/k/a Zvi Fuchs, and SABINA BEN-YEHUDA, a/k/a Sonia Ben-Yehuda, the defendants, and others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate and agree together and with each other to commit offenses against the United States, to wit, to commit securities fraud in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Section b-5.

2 2. It was a part and an object of the conspiracy that ZVI FUKS and SABINA BEN-YEHUDA, and others known and unknown, unlawfully, willfully and knowingly, directly and indirectly, by use of the means and instrumentalities of interstate commerce, the mails and the facilities of national securities exchanges, did use and employ manipulative and deceptive devices and contrivances, in violation of Title 15, Code of Federal Regulations, Section b-5, by (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would and did operate as a fraud and deceit upon ImClone Systems Incorporated ( ImClone ) and its shareholders, and other persons and entities, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Section b-5. Overt Acts 3. In furtherance of the conspiracy and to effect the illegal objects thereof, the following overt acts, among others, were committed in the Southern District of New York and elsewhere: a. On the morning of December 27, 2001, at approximately 8:22 a.m., SABINA BEN-YEHUDA, who was in Israel, had a tele conversation with the then-chief executive officer of ImClone, Samuel Waksal, who was in New York, New York. b. On the morning of December 27, 2001, at approximately 8:39 a.m., SABINA BEN-YEHUDA, who was in Israel, had a tele conversation with ZVI FUKS, who was in New York, New York. c. On the morning of December 27, 2001, before 9:27 a.m., ZVI FUKS, in New York, New York, caused the sale of all of his ImClone common stock from his account at Bear Stearns. d. On the morning of December 27, 2001, before 9:27 a.m., SABINA BEN-YEHUDA caused the sale of all of her ImClone common stock from her account at UBS Paine Webber, in New York, New York. (Title 18, United States Code, Section 371). 2

3 COUNT TWO (Securities Fraud) 4. On or about December 27, 2001, ZVI FUKS, the defendant, unlawfully, willfully and knowingly, directly and indirectly, by use of the means and instrumentalities of interstate commerce, the mails and the facilities of national securities exchanges, did use and employ manipulative and deceptive devices and contrivances, in violation of Title 15, Code of Federal Regulations, Section b-5, by (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would and did operate as a fraud and deceit upon ImClone and its shareholders, and other persons and entities, in connection with the sale of 89,173 shares of ImClone common stock from an account at Bear Stearns held in the name of Zvi Fuks and his wife. (Title 15, United States Code, Sections 78j(b) and 78ff; Title 17, Code of Federal Regulations, Section b-5). COUNT THREE (Securities Fraud) 5. On or about December 27, 2001, SABINA BEN-YEHUDA, the defendant, unlawfully, willfully and knowingly, directly and indirectly, by use of the means and instrumentalities of interstate commerce, the mails and the facilities of national securities exchanges, did use and employ manipulative and deceptive devices and contrivances, in violation of Title 15, Code of Federal Regulations, Section b-5, by (a) employing devices, schemes and artifices to defraud; (b) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices and courses of business which operated and would and did operate as a fraud and deceit upon ImClone and its shareholders, and other persons and entities, in connection with the sale of 1,178 shares of ImClone common stock from an account at UBS Paine Webber held in the name of SONIA BEN-YEHUDA. (Title 15, United States Code, Sections 78j(b) and 78ff; 3

4 Title 17, Code of Federal Regulations, Section b-5). The bases for my knowledge and for the foregoing charge are, in part, as follows: 1. I am a Special Agent of the Federal Bureau of Investigation (the FBI ). I am currently assigned to a criminal squad responsible for investigating securities fraud and related offenses, including insider trading. 2. I have participated in the investigation of this matter, and I am familiar with the information contained in this affidavit based on my own personal participation in the investigation, my review of various documents, records, and reports, and my conversations with other individuals, including other law enforcement officers. Because this affidavit is submitted for the limited purpose of establishing probable cause to arrest ZVI FUKS and SABINA BEN-YEHUDA, the defendants, I have not included herein the details of every aspect of the investigation. Where actions, conversations and statements of others are related herein, they are related in substance and in part, except where otherwise indicated. ImClone Systems, Inc. 3. Based on my review of publicly-available documents, I am aware that ImClone Systems Incorporated ( ImClone ) is a corporation organized under the laws of the State of Delaware with its principal place of business in New York, New York. ImClone is engaged in the business of developing biologic medicines, including the development of Erbitux, a biologic treatment for irinotecan-refractory colorectal cancer. As of December 2001, ImClone had described Erbitux as its lead product candidate. ImClone s common stock is listed on the NASDAQ National Market System, an electronic market system administered by the National Association of Securities Dealers, under the symbol IMCL. Until May 22, 2002, when he resigned, Samuel Waksal was president, chief executive officer, and a director of ImClone. In December 2001, ZVI FUKS was a member of ImClone s Scientific Advisory Board. The Insider Trading Scheme Samuel Waksal s Acquisition of Inside Information 4. Based on documents I have reviewed, I have learned that on or about October 31, 2001, ImClone submitted to the United States Food and Drug Administration (the FDA ) a 4

5 Biologics Licensing Application ( BLA ) for approval of Erbitux (the Erbitux BLA ). Based on information I received regarding statements made by a representative of the FDA, I am aware that the FDA has 60 days from the date a BLA is submitted to decide whether the BLA is administratively and scientifically complete to accept the BLA for FDA review. Only if a BLA is accepted for filing does the FDA review the application to determine whether the treatment will be approved. Because Erbitux was at the time ImClone s lead product candidate, I believe that information regarding the FDA s decision on the Erbitux BLA would have been material to investors in ImClone stock in December I have reviewed testimony before the United States Securities and Exchange Commission given by Samuel Waksal, in which he testified, in substance and in part, that on December 26, 2001, at approximately 6:00 p.m. or 7:00 p.m., he learned that a source within the FDA stated that ImClone was expected to receive a Refusal to File Letter from the FDA on December 28, Based on my training and experience, I submit that there is probable cause to believe that the FDA s decision to reject the Erbitux BLA was information that was material to investors. The Illicit Trading 7. Based on brokerage records I have reviewed, I am aware that on December 27, 2001, at approximately 9:27 a.m., an unsolicited order was placed to sell all of the ImClone common stock that ZVI FUKS held in his account at Bear Stearns, consisting of approximately 89,173 shares, yielding proceeds of approximately $5,357,216. Prior to this sale, FUKS had not sold any ImClone stock from this account since at least December 1, (FUKS had participated in a tender offer for approximately 19.9% of ImClone s common stock made by Bristol-Myers Squibb Company in October 2001 (the BMS Tender ). 8. Based on brokerage records I have reviewed, I am aware that on December 27, 2001, at approximately 9:31 a.m., an unsolicited order was placed to sell all of the ImClone common stock that SABINA BEN-YEHUDA held in her account at UBS Paine Webber, consisting of approximately 1,178 shares, yielding proceeds of approximately $73,453. Prior to this sale, BEN- YEHUDA had not sold any ImClone stock from this account since at least May 1, (BEN-YEHUDA had participated in the BMS Tender.) 5

6 9. I am aware that Samuel Waksal was arrested on June 12, 2002, on charges of conspiracy, insider trading, and perjury. Waksal was subsequently indicted, and pled guilty to charges of conspiracy, insider trading, perjury, obstruction of justice, bank fraud, and wire fraud. Among other things, Waksal admitted that he engaged in a scheme to trade on the basis of advance news that the FDA would refuse to accept for filing ImClone s Erbitux BLA. Waksal admitted that: (a) as of December 26, 2001, he was in possession of material, non-public information concerning ImClone s Erbitux BLA; (b) based on that information, on the morning of December 27, 2001, he caused his daughter to sell 39,472 ImClone shares -- all of the ImClone shares in his daughter s account -- yielding proceeds of approximately $2.4 million; and (c) within hours after receiving information of the FDA s impending action, Waksal attempted to cause 79,797 of his own ImClone shares to be sold. Waksal was sentenced to 87 months imprisonment and is currently serving his sentence. 10. I have reviewed testimony given by Samuel Waksal to the grand jury on February 2, 2005, pursuant to a Court Order that required Waksal to testify before the grand jury and provided that no testimony, or any information directly or indirectly derived from his testimony, may be used against Waksal in any criminal case, except for perjury, giving a false statement, or otherwise failing to comply with the Order. Waksal testified, in substance and in part, as follows: a. Waksal has known FUKS since in or about FUKS introduced Waksal to BEN-YEHUDA in or about BEN- YEHUDA and FUKS had a very close personal relationship; b. In December 2001, Waksal discussed with FUKS concerns expressed by the FDA about ImClone s Erbitux BLA; c. On the morning of December 27, 2001, Waksal informed BEN-YEHUDA that he had heard that it was highly likely that ImClone would receive a Refusal to File letter from the FDA, and that Waksal felt that such a letter would have an adverse effect on ImClone s stock price. BEN-YEHUDA asked Waksal whether she should sell her ImClone stock; whether she should call a Swiss individual who handled securities transactions for her and for Waksal (the Swiss Broker ); whether she should buy put contracts (options contracts that give the holder the right to sell stock at a specified price in the future); and whether she should inform FUKS of this information. Waksal told BEN-YEHUDA that she should inform FUKS. 6

7 d. Waksal subsequently spoke to FUKS, who informed Waksal that he had sold all of his ImClone stock after speaking with BEN-YEHUDA and thanked Waksal for making sure that BEN- YEHUDA was taken care of. e. In January 2002, Waksal met with BEN-YEHUDA, who informed Waksal that FUKS was worried because he had been contacted by the FBI. Waksal stated that FUKS should not worry because FUKS had not spoken directly to Waksal. BEN-YEHUDA replied that she was worried because FUKS had spoken to her and sold stock based on the information that she provided to FUKS about what was going to happen with the Erbitux BLA. f. Subsequently, Waksal had a conversation with BEN- YEHUDA, who stated that she and FUKS were worried because they were aware Waksal was under investigation and had concerns about what Waksal might say. BEN-YEHUDA asked whether Waksal was going to protect her and FUKS. Waksal replied that he would. g. After Waksal was arrested in June 2002, Waksal had a conversation with BEN-YEHUDA, in which BEN-YEHUDA stated to Waksal that FUKS was very concerned about what Waksal might say to the authorities. Waksal told her not to worry. h. At some point after Waksal was arrested, he was interviewed by representatives from the United States Attorney s Office for the Southern District of New York, the SEC, and the FBI. In that interview, Waksal was asked what he knew about trading in ImClone stock by BEN-YEHUDA and FUKS. Waksal admitted in the grand jury that he had not been truthful in the interview when he answered those questions, and stated that he understood that, as a result, he had no expectation of receiving a reduced sentence or any benefit as a result of his testimony before the grand jury. 11. I have reviewed tele records that reflect the following tele calls in the morning of December 27, 2001: Time of Call From To Length of Call 6:51 a.m. 8:06 a.m. 8:22 a.m. Waksal s home cell cell cell Waksal s office Waksal s office 19 seconds 2 minutes 4 minutes 7

8 8:27 a.m. 8:28 a.m. 8:31 a.m. 8:39 a.m. cell FUKS s cell 1 minute cell Swiss Broker s 2 minutes cell Waksal s office 2 minutes cell FUKS s cell 7 minutes Public Announcement of the FDA Decision 12. Based on documents I reviewed, I have learned that on December 28, 2001, at approximately 2:55 p.m., the FDA transmitted to ImClone via facsimile a letter stating that the FDA had refused to accept the Erbitux BLA for filing. After the close of business on December 28, 2001, ImClone issued a press release announcing that the FDA had refused to accept the Erbitux BLA for filing (the RTF Press Release ). 13. On December 28, 2001, prior to the issuance of the RTF Press Release, the closing price of ImClone stock was $ On December 31, 2001, the first day that ImClone stock traded after the issuance of the RTF Press Release, the price of ImClone stock closed at $46.46, representing a decline of approximately 16%. 14. By ZVI FUKS selling 89,173 shares of ImClone stock, and by SABINA BEN-YEHUDA selling 1,178 shares of ImClone stock, on the morning of December 27, 2001, prior to ImClone s public announcement of the FDA s refusal to accept for filing the Erbitux BLA, ZVI FUKS and SABINA BEN-YEHUDA avoided losses of approximately $1,214,000 and $18,700, respectively. WHEREFORE, deponent prays that the above-named individuals be arrested and imprisoned or bailed as the case may be. DAVID MAKOL Special Agent Federal Bureau of Investigation Sworn to before me this 4th day of March, 2005 UNITED STATES MAGISTRATE JUDGE 8

9 SOUTHERN DISTRICT OF NEW YORK 9

10 Based on the confidential ongoing nature of this investigation, I respectfully request that this Complaint and any warrant issued thereon be filed under seal. MICHAEL S. SCHACHTER Assistant United States Attorney 10